Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

These 3 Companies Dominate Smartphone Apps

Apple Music was the second-fastest app in terms of user growth this year. Image source: Apple.

If you're familiar with the phrase "location, location, location," it's highly likely you're involved with real estate or at least have been in the market for buying a home. More recently, however, this expression could equally be applied to the smartphone app market, as a plethora of third-party developers have flooded both Apple's (NASDAQ:AAPL) iOS and Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Android, as now both ecosystems boast more than 1 million apps.

What hasn't increased as quickly, unfortunately, is on-device storage for iPhones and the host of manufacturers sporting Android's operating system. For example, Apple still offers a 16GB iPhone at the low end, a figure that hasn't been updated since 2012. With the last-gen iPhone 6 and iPhone 6 Plus, Apple now offers a 128GB storage version -- but it will cost you $200 more than the 16GB one.

Additionally, app developers must contend with storage of photos, videos, and music for space in addition to competing apps. So you can see that smartphone storage space is as in demand as undeveloped property in Lower Manhattan. As such, getting on a phone and used by consumers is harder than ever. When it comes to the top apps, owning the land -- meaning ecosystem -- appears to be the most important factor. Here's a visual of these top apps:

10 apps, three companies, one third partyRecently, global information and analytics company Nielsen released its top smartphone apps of 2015 based on the number of monthly average unique users. Interestingly enough, of the top 10 apps, all are owned by three companies: the aforementioned Apple and Alphabet, and Facebook(NASDAQ:FB) as the only non-native app developer on the list. Not only is Facebook notable in terms of being the only third-party company on the list -- it is also the company doing more in terms of user growth.

Overall, Zuckerberg and Co. have three apps in the top 10: The app for the company's eponymous site comes in No. 1, with nearly 127 million monthly average unique users; Facebook's Messenger notched 96 million users to claim No. 3; and Facebook-owned Instagram's 55 million monthly users is good for No. 8.

From a growth perspective, Facebook Messenger reported 31% more users this year than last, and Instagram reported 23% growth. Of the top 10 apps, these are the fastest and third-fastest growing apps on the list, with Apple Music splitting the two with 26% year-on-year growth. Even Facebook's main app reported 8% annual growth, not a bad result considering its scale.

It's good to own the ecosystemUnfortunately for third-party developers, the remainder of the list is claimed by the ecosystem providers themselves. The second-largest app by monthly active user figure is Alphabet's YouTube, with nearly 97 million users. In addition, the company's Google suite of apps -- Search, Play, Maps, and Gmail -- claim Nos. 4-7 on the list.

As these apps are required on most Android units, it shows that if you can get on the device, usage will follow. Interestingly enough, however, Google's suite of services seems to be relatively growth constrained compared with Facebook's growth, with Google Maps' 8% figure the high-water mark for monthly average unique user growth on a year-on-year basis.

Apple, on the other hand, finishes No. 9 and No. 10 with Apple Music and Apple Maps. And this makes sense, as the company's installed base isn't as large as Android's. As earlier mentioned, Apple Music has increased its monthly active users 26% as the new subscription-based business model has reignited interest. In addition, after a much-maligned initial rollout, Apple Maps grew 16% on a year-on-year basis as the service has noticeably improved.

Author

Inspired by the idea of "making your money work for you" at a young age, mostly because he was a lazy child, Jamal parlayed that inspiration into a love of the psychology of markets, competitive advantages, and thematic investing. He later shrug off that laziness, with a career that included stints as a mortgage trainer, a financial advisor, a Sr. Investments Communications Specialist, and a stockbroker. Jamal graduated from George Mason University with a bachelors of science in finance, American University with a masters in finance, and is a CFA charterholder.